Consumer Strategies for Healthcare Providers

Historically, patients have had limited choices with regard to site of service (e.g., hospitals, emergency departments or physician practices), so patient preference was relatively unimportant. Instead, the location of physician offices was focused on physician convenience, which explains the proliferation of medical office buildings on hospital campuses.

In contrast, American consumers expect convenient goods and services tailored to their unique preferences in every other part of their lives. As digital health companies and large retailers like Amazon and Walmart expand primary care services and offer abundant choices for where and when patients receive care, patient choices increasingly reveal a preference for on-demand care outside of traditional care pathways (e.g., retail care, alternative medicine).

Traditional providers who are reluctant to align care delivery with consumer preferences should at least understand those preferences to compete with new entrants in a shrinking market of commercially insured patients with increasing options for care. Likewise, traditional providers eager to innovate to align with consumer preferences must understand that consumer loyalty requires more than an EMR portal and opening clinics in wealthy neighborhoods that see patients until 8PM.

To transition to a consumer-focused enterprise, healthcare provider organizations must answer:

Use Case: Prioritizing Service Line Growth

Adopting a “focused factory strategy” is seemingly obvious in a resource-constrained industry. Doing so requires healthcare providers to allocate resources strategically to service lines where they are positioned to compete effectively. Provider organizations should prioritize service lines with high margin, acceptable quality, strong provider alignment and increasing consumer demand.

In this example, using a combination of provider directory, utilization and demand forecast data, an example health system’s service lines are plotted against a competitor based on provider alignment, visit volumes and patient revenue, revealing the Neuro/Spine, Heart/Vascular, OB/GYN and Orthopedic service lines as high-priority service lines. While the Digestive volumes are high, low physician alignment limits the return on investment in that service line, with only 20% of downstream care staying in system.

However, an analysis of future demand for each service line reveals that Orthopedics and Heart/Vascular should be the highest priorities for service line investment. In this example, using a demand forecast based on local utilization, the Orthopedics and Heart/Vascular service lines are projected to have a 3.6% and 4.2% compound annual growth rate (CAGR), respectively, over a five-year period. In contrast, future demand for Neuro/Spine is much lower, and OB/GYN is declining.

Steps to Prioritize Service Line Growth

1. Define Objectives and Service Line Selection Criteria

Translate the broad goals of the strategic plan into specific service-line objectives that are measurable, achievable, and aligned with the mission and vision of the organization. Establish criteria for selecting target service lines, including factors such as volume of services provided, quality performance, market share, patient satisfaction, geographic accessibility and price.

2. Identify Key Performance Indicators

Identify relevant key performance indicators to measure the success of growth initiatives, such as patient acquisition cost, patient lifetime value, conversion rates and return on investment (ROI).

3. Gather and Consolidate Data

Collect relevant data from internal sources, including electronic health record (EHR) data, patient surveys, website analytics and insights from past marketing campaigns. Curate external data sources such as market utilization, industry studies, and demographic data to understand market trends and emerging healthcare needs.

4. Assess Service Line and Market Growth Opportunities

Leverage external data to identify opportunities for service line expansion and market differentiation. Prioritize service line opportunities through the analysis of current market share, competitive landscape, future service demand, reimbursement rates and provider alignment.

5. Collaborate with Key Stakeholders

Collaborate closely with internal stakeholders, including senior leadership, clinical teams, operations and other departments to ensure alignment between growth initiatives and strategic priorities. Seek input and feedback from stakeholders based on the key findings from the service line selection analysis to ensure buy-in and alignment with the strategic plan and allocation of any necessary capital.

6. Create Operational Marketing Plan

Allocate marketing resources, including budget, personnel and technology, in alignment with strategic priorities. Develop integrated campaigns that leverage multiple channels, including digital, social media, email, traditional advertising and community outreach. Create highly targeted messaging to reinforce key initiatives and effectively communicate the value proposition. Ensure consistency in messaging and branding across all channels to enhance brand recognition.

Use Case: Developing Lead Plans for High-Margin Services

Provider organizations can more effectively allocate scarce marketing resources with a hyper-local understanding of projected consumer demand.

In this example, using a combination of provider directory, utilization and health plan price transparency, the market opportunity for Total Joint Replacement (TJR) volume, based on patients in the market who have been diagnosed but have not had surgery, is estimated at 8,960 patients in the service area:

Demand is not distributed evenly across the market. Based on the concentration of future demand, the health system should focus its market strategy on building awareness and loyalty for consumers in the three strategic zones outlined in red.

These strategic zones represent significant opportunity for growth, but the health system is not well-positioned to capture that demand, with low market share in key ZIP Codes. For example, in the ZIP Code with the highest projected demand, the health system has only 6% market share, limiting its ability to capture a significant portion of the projected $9.6 million revenue opportunity. With a hyper-local view of consumer demand, the health system can deploy its marketing resources to develop brand awareness with consumers who are most likely to need future surgical intervention.

Steps to Develop Lead Plans

1. Identify High-Margin Services and Capacity Requirements

Analyze service lines and procedures that generate highest incremental margin for the organization. Ensure that the organization has capacity for incremental growth in the target service lines or procedures.

2. Define the Target Audience

Prioritize high-value patient cohorts that are most likely to benefit from the target service line or treatment. Analyze internal data to identify opportunities to increase engagement with consumers in the market. Leverage external data to identify target cohorts with the highest potential for new customer acquisition based on healthcare need and preferences.

3. Analyze Internal Data

Analyze internal data on patient interactions and touchpoints throughout the network, including website visits, appointment scheduling, clinic visits and follow-up care. Map the patient journey to identify key touchpoints where marketing interventions can enhance patient engagement and satisfaction. Use EHR data to identify patients in need of preventive screenings and/or follow-up care related to the target service line. Tailor marketing campaigns to promote the service line and deliver targeted health education content.

4. Analyze External Data

Leverage external market data to build targeted marketing campaigns that effectively reach and engage potential new patients. Identify gaps in the market, areas of unmet healthcare need and opportunities for differentiation that can be leveraged to attract new patients. Utilize geospatial data and mapping tools to analyze the geographic distribution of potential patients within the service area.

5. Identify Community Engagement Opportunities

Analyze community demographics, health indicators, and socioeconomic factors to understand the unique needs of different neighborhoods and populations. Develop community engagement initiatives and partnerships with local organizations to reach and engage potential new patients in underserved communities.

6. Create a Data-driven Marketing Plan

Use data-driven insights to make informed decisions, optimize marketing strategies and allocate resources effectively to support business objectives. Utilize website analytics, search engine optimization (SEO) data and social media metrics to optimize online marketing efforts, continuously evaluating the effectiveness of marketing campaigns in achieving strategic objectives. Adapt campaign strategies as appropriate based on changing market dynamics, patient needs, competitive landscape and feedback from stakeholders.  

Use Case: Improving Patient Communications and Network Development with Psychographics

Consumer-focused enterprises understand the importance of psychology in consumer decision-making, and consumer psychology influences healthcare decisions as well. There are five healthcare psychographic profiles: Balance Seeker, Direction Taker, Priority Juggler, Self Achiever and Willful Endurer.

In this example, using a combination of provider directory, utilization and consumer data, Vanderbilt Health has a higher proportion of patients with the Self Achiever psychographic profile than all but one of the largest healthcare providers in the Nashville market.

As a result, Vanderbilt Health might tailor their patient outreach strategies for Self Achievers, using phrases like “overcome the challenge,” “exceeding your health goals,” and other phrases that are likely to resonate with this group.

Psychographics inform consumer preferences for care delivery options as well as communication. Understanding consumer preferences for the type and site of care can inform network development, ensuring that the network has a sufficient supply and mix of primary care settings for the members in the target market. Self Achievers prefer traditional relationships with primary care providers and use urgent care and retail settings situationally. As a result, to maintain or increase its share of care in the Nashville market, Vanderbilt Health should ensure that its sites of care match the psychographic preferences of the consumers in Middle Tennessee, particularly Self Achievers.

Vanderbilt Health has opened numerous storefront urgent care clinics throughout Nashville, while locating its primary care physicians on the campus of Vanderbilt University Medical Center and a former shopping mall located a few miles from downtown. Urgent care clinics appeal to Willful Endurers, who take a reactive approach to their healthcare, only seeing a doctor when absolutely necessary.

As a result, to maintain or increase its share of care in the Nashville market, Vanderbilt Health should ensure that its sites of care match the psychographic preferences of the consumers in Middle Tennessee.

The percentage of Vanderbilt Health patients who are Willful Endurers is one of the lowest in the Nashville CBSA, and Vanderbilt Health’s urgent care centers are, with two exceptions, misaligned with the neighborhoods with a high percentage of Willful Endurers.

Steps to Analyze the Psychographic Mix of a Patient Population

1. Identify Strategic Initiatives

Identify and focus on a key strategic initiative of the organization. Focus areas may include cost new patient acquisition, network expansion, coordination of care or increasing patient satisfaction.

2. Define the Target Audience

Clearly define the scope and objectives of the psychographic analysis. Gather feedback from service line leaders on current patient retention and engagement metrics. Identify focus areas where improved patient acquisition, retention or engagement would have the greatest impact on meeting the organization’s strategic goals. Prioritize high-value patient segments that are likely to benefit from improved communication or to seek care in the provider’s network.

3. Analyze Internal Data

Analyze internal data on patient interactions and touchpoints throughout the network, including website visits, appointment scheduling, clinic visits and follow-up care. Map the patient journey to identify key touchpoints where marketing interventions can enhance patient engagement and satisfaction. Use EHR data to identify patients in need of preventive screenings and/or follow-up care related to the target service line. Tailor marketing campaigns to promote the service line and deliver targeted health education content.

4. Analyze External Data

Gather external data sources that inform the psychographic and demographic makeup of patient populations across your organization, as well as key competitors in the market:

Analyze the competitive landscape, including competing health systems, independent practices and retail providers, to understand each organization’s patient population. Assess what the demographic and psychographic mix reveals about each competitor’s strengths and weaknesses. Confirm that existing sites of service within the network are aligned with consumer preferences in target markets and have sufficient capacity to manage incremental volumes.

5. Create a Data-driven Marketing Plan

Use data-driven insights to make informed decisions on how best to engage the target patient population. Tailor patient follow-up, including the method, style and content of communications, to align with the needs and preferences of the target patient population. Create marketing campaigns to compete for the patients of key competitors, informing messaging with insight into how each consumer segment makes decisions about their healthcare. Adapt campaign strategies as appropriate based on changing market dynamics, patient needs, competitive landscape and feedback from stakeholders.

Use Case: Tracking Patient Loyalty and Retention

Patient loyalty is a proxy for network performance, which is a key predictor of financial performance for healthcare providers. Using analytics that reveal longitudinal patient “care journeys,” providers can calculate patient loyalty metrics and quantify the “lost” revenue when patients seek care from other providers.

In this example, using a combination of provider directory and utilization data, a healthcare provider lost $90 million in downstream revenue from patients who sought treatment from competing clinics for subsequent care episodes. The market-level analysis reveals that the Detroit and Phoenix markets should be a strategic focus for improving patient loyalty.

Steps to Conduct a Patient Retention and Churn Analysis

1. Internal Planning

Meet with service line leaders and key stakeholders to define specific metrics and goals related to patient retention, including establishing internal benchmarks for patient retention rates, referral leakage rates (patients seeking care outside the system) and patient satisfaction. Clearly define the scope of the patient retention analysis, including the target service lines to be assessed and the definition of the primary and secondary service areas.

2. Curate Internal Data

Curate relevant data from internal sources such as employed physician rosters, referral tracking data and patient satisfaction surveys, including patient demographics and feedback.

3. Curate External Market Data

Normalize external data to align with internal network definitions, including classifying physicians and facilities based on system ownership. Determine metrics for patient retention reporting. Common metrics include procedures performed and downstream revenue capture.

4. Assess Network Performance

Analyze the collected data to calculate key performance metrics related to patient retention. Track and monitor the longitudinal journey of each patient to identify gaps in the network and quantify the amount of patient outmigration over time, as well as across key service lines, geographic areas, settings of care and demographic and psychographic consumer segments. This may involve calculating patient retention and referral leakage percentages by service line, market and setting of care (e.g., telehealth, urgent care).

5. Root Cause Analysis

Conduct a root cause analysis to understand the factors contributing to patient retention and churn, including competitive landscape, access to care, physician-patient communication and external factors affecting patient choice. Based on these findings, develop strategic initiatives to improve care coordination, expand access based on the needs and preferences of consumers and strengthen relationships with referring physicians.

6. Monitoring and Continuous Improvement

Continuously track and analyze key performance metrics related to patient retention and churn to assess progress and make necessary adjustments to performance improvement initiatives. Foster a culture of continuous improvement within the system by regularly reviewing performance metrics, soliciting feedback from physicians and patients and identifying opportunities for further optimization of network integrity and overall performance.